Real Estate Investor Magazine South Africa February/ March 2020 | Page 28

MANAGING
Ignoring
tenant water
consumption will
pose significant
risks for landlords
D
ay Zero and stage 6 load shedding - South Africans
have been forced to adopt an entirely new lexicon
when it comes to living in a country where the pro-
vision of utilities is far from predictable. For landlords, espe-
cially those with units in multi-tenant complexes and flats,
understanding their obligations in an increasingly punitive
environment is more important than ever.
“South African lawmakers are tackling both the culture
of nonpayment, as well as the need to manage the usage
of electricity and water, by calling for the implementation
of prepaid meters,” explains Michael Franze, Citiq Prepaid
managing director.
“While many know the benefits of electricity prepaid sub-
metering, managing water supply with these systems is still
fairly new. However, both local and national governments will
be using their regulatory stick to ensure property owners and
managers are toeing the line and, if not, they can quickly find
themselves facing some stiff fines.”
Cape Town paved the way for future lawmakers, enacting
new bylaws while dealing with the threat of Day Zero in 2018.
The new laws did not replace the restrictions, but they did
follow the regulatory trend of placing the onus on the landlord
for more hands-on management.
For the first time, landlords of units in multi-tenant complexes
and flats were responsible for keeping record of tenants’ water
consumption and for reporting any contraventions to the
municipality.
Fortunately, the bylaws also make provision for the
installation of prepaid sub-meters which allow the landlord to
more accurately measure tenants’ consumption.
“Using the existing post-paid measurement system will only
deliver data to the landlord well after any transgressions or
anomalies take place, leaving them at the mercy of their local
administrators. Whether it was their tenant illegally filling a
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FEBRUARY/MARCH 2020 SA Real Estate Investor Magazine
swimming pool, or a leaking pipe, landlords need to be on top
of any usage patterns that are out of the ordinary and act on
them fast,” says Franze.
Pay-as-you-go utilities to tackle non-payment
Prepaid waters meters have also been sanctioned by the
national government as a means to curb the culture of
nonpayment. The inter-ministerial task team (IMTT), established
in 2017, put forward recommendations in November to pilot
prepaid water meters in four municipalities in an effort to curb
municipal non-payment.
“While the issue of outstanding debt owed to national
government is still a bone of contention, using prepaid sub-
metering as a means to move forward is the most fair and
transparent method available. Prepaid meters allow both the
property owner and the tenant to easily see exactly what has
been used – cutting down on disputes, late payment and
nonpayment,” adds Franze.
Prepaid meters allow water to be distributed from the
municipality to each unit, tracking individual household
consumption fairly and transparently. The landlord must,
however, ensure the water meter is installed by an accredited
plumber, and that the meter installation complies with all
applicable legislation, regulations and by-laws.
“When South Africa hit stage 6 load shedding in December
2019, government leaders woke up to the fact that not only
was the electricity grid under imminent threat, but that at
these levels they would not be able to sustainably supply water
to citizens either. As we move forward property owners can
expect a much more punitive regulatory regime when it comes
to utility consumption. The only way for landlords to mitigate
their risk will be through the use of prepaid meters,” concludes
Franze.
SOURCE Citiq Prepaid